The European Union and India will agree to relaunch free-trade talks stalled since 2013 at a virtual summit on Saturday, according to a draft statement seen by Reuters, as concerns about China's rise bring Brussels and New Delhi closer.
The draft statement, which must be signed off by EU ambassadors on Wednesday and needs New Delhi's final approval, would bind together two of the world's biggest economies in an alliance seen as a counter to China's power.
If approved, the EU and India will say: "We agreed to resume negotiations for a balanced, ambitious, comprehensive and mutually beneficial trade agreement which would respond to the current challenges," according to the draft statement.
The draft said that leaders would also seek an investment protection agreement, and a third deal on so-called geographical indications, which aim to protect specialised agricultural produce from France's champagne to India's Darjeeling tea.
A 2020 study by the European Parliament put the potential benefits of a trade deal with India for the EU at up to 8.5 billion euros ($10.2 billion), although the estimate was made before Britain's departure from the bloc.
The draft statement also sets the stage for an agreement for the EU and India to build joint infrastructure projects around the world, to be described at the summit as a connectivity partnership in transport, energy and digital sectors.
The deal would follow on from a similar accord signed between the EU and Japan in 2019, seeking an alternative to Chinese largesse that raised suspicion in the West and Tokyo.
"Our partnership will promote a transparent, viable, inclusive, sustainable, comprehensive, and rules-based connectivity," the draft summit statement said, in a veiled criticism of Chinese-financed projects that have sent debts in some central Asian and Balkan countries soaring.
Since 2013, China has launched construction projects across more than 60 countries, known as the Belt and Road Initiative, seeking a network of land and sea links with Southeast Asia, Central Asia, the Middle East, Europe and Africa.
The EU will also win Indian support for its new plan to step up its influence in the Indo-Pacific region, using areas from security to health to protect its interests and counter China, although the bloc insists its strategy is not against Beijing.
"We emphasized our commitment to a free, open, inclusive and rules-based Indo-Pacific space, underpinned by respect for territorial integrity and sovereignty, democracy, and rule of law," the draft statement said.
($1 = 0.8318 euros)